Is it possible to rent a home that is pre foreclosing with option to buy in Florida? Supposedly the rent is being held in escrow? Is this possible or is it a scam?

Welcome to AMHD. Who is the landlord? Are you dealing directly with the landlord or an agent of some kind? It would be possible for the present 'owner' to refinance or file bankruptcy, chapter 7 or 13, and upset the arrangement you are describing. You would be well-advised to have your attorney look over this.
Have you seen this thread? https://www.askmehelpdesk.com/real-estate-law/owner-financing-home-you-do-not-own-329525.html

If a house is in foreclosure, then once its foreclosed any lease or contract for sale would be voided.

They only way I would buy a house in foreclosure is if I would be assured, the outstanding loans were paid off.